Coding changes driving reductions in readmission rates

A new study, published Monday in Health Affairs, showed that reductions in readmissions rates corresponded to a change the CMS made allowing hospitals to increase the number of diagnosis codes they could submit for patient claims. That change impacted the risk-adjustment the CMS uses to determine changes in readmission rates, making patients overall appear sicker and therefore caused any readmission improvements made by hospitals to appear better. This is the second study in the past year arguing that some of the improvements seen in readmission rates were caused by changes in coding practices.

According to the newest study, 81% of hospital admission claims reported nine or 10 diagnoses to the CMS in November 2010. But when the CMS changed standards in January 2011 and allowed hospitals to report more than 10 and up to as many as 25 diagnosis codes to Medicare, 70% of admission claims that month reported 11 or more diagnoses while only 15% reported nine or 10. Readmissions declines were much larger among claims that took advantage of the new standards. According to the study, during the period in which hospitals were anticipating the readmissions program—April 2010 to September 2012 —declines in readmissions were 48% smaller when risk adjustment considered nine or fewer diagnosis codes than when risk adjustment considered 11 or more diagnoses.

"The change in risk adjustment is occurring over this narrow time period and it appears to be driven by this increase in coding—coding 10 or more diagnosis codes wasn't allowed before," said Christopher Ody, lead author of the study and a research assistant professor in the Kellogg School of Management at Northwestern University.

A CMS spokesperson said the agency is currently reviewing the analysis. Nonetheless, the Medicare Payment Advisory Commission in June reported that the penalty program successfully led to drops in readmission rates. According to MedPAC, between 2010 and 2016, readmission rates for heart attack patients fell by 3.6 percentage points, 3 percentage points for heart failure patients and 2.3 percentage points for pneumonia patients.

The older study, published in February 2018 in JAMA, concluded about 63% of the reduction in readmission rates in the HRRP program are due to coding more severely.

"Even though these are different methods, the punchline is still the same. At best the hospital readmissions program reduced readmissions in maybe half the magnitude we think," said Dr. Andrew Ibrahim, lead author of the JAMA study and general surgeon at University of Michigan.

The new Health Affairs study also noted that decreases in readmission rates were not significantly larger in HRRP hospitals when compared to those that were not part of the program. The researchers compared baseline readmission rates for that finding.

Ody said considering his study and others linking rises in mortality to the readmissions program, he hopes the CMS will gradually roll out pay for performance programs instead of implementing them nationwide without significant testing.